Options Trading: This is how people go broke! So don't do this! // Options trading tips & strategies
Options Trading: This is how people go broke! So don't do this! // Options trading tips strategies basics tutorial 101 explained for beginners for dummies, Options trading tutorial 101, how to trade options for beginners, Stock market 101, stock market basics, stock market for beginners, stock market for dummies, stock market recession, stock market tips, stock market explained, stock investing tips, stock investing 101, stock investing for beginners, stock investing for dummies, stocks for beginners, stock crash coming, stock market investing tips, stock market investing strategies, stock market investing advice, stock market bubble, stock market bubble explained welcome to looking at the markets with David Moadel here's a tip an important tip for options traders please don't get greedy greed is such a destructive force for traders i always say that in options trading greed and fear aren't the two things that can bring a good trader down and could cause you to blow up your account and i'm going to give an example from today today is the 9th of december 2016 and we're going to look at google call options and today's a friday and so the these are the weekly options which expired today alright so if you had purchased a google call option the weekly call option expiring today at four o'clock p.m.Eastern time if you had bought the 810 call 8-10 strike price call yesterday Thursday you would have and and and you add a held onto it overnight today at 1142 p.m. eastern time you would have more than doubled your money you would have profited a hundred and thirty point seventy-seven percent that's more than doubling your money your call options would have gone up from thirteen cents a share to thirty cents a share and personally I don't know about you but i recommend if you double your money in any investment any short-term investment especially if it's going to expire in a few hours take profits i recommend taking profits if you double your money just be happy with that doubling your money is fantastic it really is ok so here at eleven-forty 2pm google had gone up you know it had gone up more than 1% google stock and so it was up to 80 for dollars in ten cents still out still out-of-the-money at this point you know it it it hadn't reached 8 10 but because it had gone up so much in options traders decided that there was still a lot of hope that it would reach and exceed 8 10 by the end of the trading day today and that's why the call options were worth so much more and if you hadn't sold if you hadn't you know sold off your call options and and taking profits and if you had waited until 3 45 43 46 p.m.
Eastern time with only 14 minutes left in the trading day your call option would would have gone from a hundred and thirty percent gain two thirty percent loss would have gone from thirty cents a share 29 cents a share why is that and and the price of google had gone up even more it went from 80 for 10 in the middle of the day 280 873 almost 8 10 by 3 46 p.m. but there were only 14 minutes left in the trading day and so there wasn't a whole lot of hope left that Google would exceed 8 10 would meet or exceed 8 10 x by the end of the trading day in in 14 minutes and then by 359 p.m. with only a minute left in the trading day even though Google had gone up a little more it went up to 80 80 and 85 cents almost 8 10 but that's not good enough with only one minute left it was pretty hopeless the you know hoping that Google would would meet or exceed 810 which is this which was the strike price so the call options had gone down to five cents a share for a 61 and a half percent loss from a more than doubling your money to losing most of your money and and possibly all of it if you held onto it even longer so don't get greedy please this could happen okay now don't get me wrong if you double your money let's say you had doubled your money here and then took profits and then Google went up to 8 15 8 20 whatever 825 then you would have maybe triple or quadruple your money and so they're going to be times that you're gonna double your money and then take profits and then maybe regret it later because you could have made even more money but you can't think like that because you'll drive yourself crazy that's why it might be a good idea to just call it a day just you know as soon as you double your money and take profits just you can walk away from the computer it's okay to do that and not even look for the rest of the day. I mean unless you have other investments that you have to look at but I'm just saying you might want to walk away from that and and not look so you don't feel the regret because again doubling your money is fantastic and so that's a guideline they're all right so
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